Thank you, Dana, and good morning, everybody. Before I turn the call over to Pioneer's CEO, Stacy Locke; and to CFO, Lorne Phillips, for their formal remarks, I have a few of the usual items we need to cover.

First of all, a replay of today's call will be available by webcast and also by phone replay. You can find that information for both in this morning's news release. Just as a reminder, information reported on this call speaks only as of today, July 31, 2018, so any time-sensitive information may not be accurate at the time of the replay.

Management may make forward-looking statements that are based on beliefs and assumptions and information currently available to them. While they believe these expectations are reasonable, they can give no assurance they'll prove to be correct. They're subject to certain risks and uncertainties and assumptions described more in today's release and also in recent public filings with the SEC. So if one or more of these risks materialize or should the underlying assumptions prove to be incorrect, actual results may differ materially.

Also, please note that this conference call may contain references to non-GAAP measures. You'll find a reconciliation to the GAAP measures in this morning's news release.

Now I'd like to turn the call over to Stacy Locke, Pioneer President and CEO. Stacy?

Thank you, Anne, and good morning. I appreciate you all joining us on our second quarter call. Here with me in San Antonio is Carlos Peña. He is President of our wireline and coiled tubing services sector; and, of course, Lorne Phillips, our Chief Financial Officer.

As you can see from the press release, we experienced a number of crosscurrents in the second quarter, which muddled up our results somewhat. However, our strategy and our long-term optimism is fully intact.

On the drilling side, in the second quarter in the U.S., we had kind of a customary heavy SR&M due to mast and sub inspections and recertification, also some mud pump refurbishments, which typically gets spread over a longer period, but are often times after the winter for most of the rigs in the northern areas of the U.S. But it hit kind of all at once, and we anticipate our SR&M to kind of revert back to normal SR&M going forward.

In addition, we had some health insurance increases in the quarter. We had some day rates that were pushed back a little bit that were anticipated to be in the second quarter that will go on to increase in the third quarter just because they were on pads doing work. We also, as customary, our boiler pricing, which affects the rigs in the north to provide heat to the rigs, that's a pretty good source of income, that falls off -- fell off in this quarter as well.

And then we had one of our new-build rigs from the prior build session repriced down pretty significantly in the quarter, right at the beginning of the quarter, that had an impact on drilling as well.

But fundamentally, the U.S. drilling market is outstanding. Forward dayrates are high, have continued to go up. I would say the forward dayrates today are kind of in the $22,000 to $25,000 per day, and that includes a wage increase that we put in effect in July.

And we've been able to increase the duration on our term contracts. Everything pretty much just rolled forward, and we've renewed mostly 1-year term contracts, although we're just about to finalize a 2-year term contract. And as you saw from the press release, we just executed a 3-year term contract in kind of the mid-20 effective dayrates for one of our existing clients in the Permian with this brand-new rig that will be delivered in the first quarter of next year. So we're very excited about that.

Overall, the performance of our U.S. drilling operations has been superb, and we expect to remain 100% utilized in the U.S. and to continue rolling contracts forward at a higher rate. So Lorne, I know, will have some more detail on that in a second.

Colombia is doing equally as well. 7 of our 8 rigs are working. The eighth rig is still stacked, and we're not anticipating spending the money in the short term to upgrade that to put it out in the field. But during the -- during this quarter, we did have some unusual events that were really unanticipated. One of our rigs -- rig moves in Colombia, by and large, are buried along. And we had 2 exceedingly long rig moves with one of our top-performing rigs where they moved it across the country, drilled a well, and then moved it all the way back. So in that quarter, we had just less than 30 days of actual dayrate from that rig. Then we had another circumstance where we moved on location, and there were some issues relating to the location out of our control, and we had to allow the operator at the time to sort out what those issues were. And so we have been on standby at a much lower rate than dayrate for an extended period of time.

But all in all, we've got great clients in Colombia. We're very happy with our relationships. We have a good working relation with those people. We have cleaned up some of the contracts to make them more lucrative and more profitable to us. So we see profitability in Colombia continuing to improve as we go forward. And we are very, very optimistic about that market.

Turning now to the Production Services side of the business. Both our wireline and well services performed well in the quarter. The big issue for the quarter was really our coiled tubing operations, which materially underperformed and really was the cause for our miss on margin guidance for the production service space.

Coil it's an ever-changing market. We're seeing very pretty rapidly the decrease in demand for our small pipe units and greater demand for the large pipe. Fortunately, we had started our transition with our coiled tubing services to the large pipe focused previously, but it really kind of impacted us. The other aspect of coiled tubing that's impacted us, due to the longer laterals, it puts a lot of strain on our pump capabilities, and our pumps are probably arguably a little on the lower horsepower range for the type of work we're doing. So in this quarter in particular, we suffered from some pump failures, which necessitated renting pumps, and that quickly alleviate your profitability. And so it was a struggle from that point. We are mitigating that. We fixed up a bunch of pumps, upgraded them, and we've ordered additional higher-horsepower pumps. So we think it's a short-term phenomenon, but it was an impact there.

We also had a significant sales tax accrual, and we discontinued our operations in the offshore market, which we've been tracking all year, hopeful that it was going to get better, finally decided to eliminate our offshore services. So we had some yard closure and severance booked in this quarter. And we did the same for our wireline services offshore. But we are redeploying the people and assets from those offshore businesses to other markets.

So we think the bad news in coil is behind us. We've taken delivery of our 2 3/8 units, and it has gone to work and is working today, and basically has worked everyday since it arrived. We've got a second 2 3/8 units coming in the fourth quarter. We think the same for that unit that it's going to be very active. And then as we receive our larger-horsepower pumps for our George West operation, we think that profitability is going to improve there. And so the future is much brighter in coil. And we do see demand for some of the 2-inch units and even some small pipe, but we're -- that's less of an emphasis for us going forward.

At the quarter end, we had 10 units in July. We took delivery of the 2 3/8 unit. They gave us 11. During the quarter, we did place the 4 small pipe units in a held-for-sale status, and we since sold 3 of those in July. So what we're left with today, as I mentioned, are 11 total units; 4 of those are large pipe and 5 are small pipe, but in that 5 are 3 2-inch, which people still do some longer stuff and drillouts with 2-inches well.

And then we have 2 cold stacked offshore skids that we're holding for the time being in cold stacked status. So it's 11 total units with the 12th unit coming in the fourth quarter, which will be a 2 3/8 units.

So turning now to well servicing. I think the best way to describe our well servicing operation is stable. It's -- I'd say the 24-hour work has really not come back in a great degree in the markets that we're in like we saw in 2012, '13 and '14. But we do, like today, have 4 working, yesterday, we had five 24-hour. It ebbs and flows. But it's not as robust as it has been in the past up cycle.

Labor continued to be very tight. Still have the 125 units; 12 of them are 600-horsepower, and 113 are 550-horsepower. But we are seeing very subtle improvement in utilization and think that if the oil price can hold in the $70, $70-plus range, that market will continue to improve.

The other aspect of well servicing that we're somewhat excited about is that we're seeing some opportunity that we've -- that we -- we're seeing some of the operators express interest in drilling out their plugs with stick pipe as opposed to coil. And so we're pursuing that. We've had a number of meetings with our clients. It just so happens that we have 20 118-foot masts. These are the taller masts required to effectively do the long lateral drill outs. But that trend is continuing. So we've ordered some pumps and some swivels, and we are pursuing that market. We think that it can be done profitably, and even perhaps in the Permian, done profitably. So we're looking into that and we're excited about it, about the opportunity to access some higher-margin work and utilize more of our stacked drilling rigs.

On the wireline front. Wireline has been strong all year and was strong in the second quarter. We have certain key clients in non-Permian markets that have been extremely active. Just coincidentally, several of them have paused a little bit at the end of the second quarter, and we started off July rather slow. And it's nothing to do with their programs or the Permian takeaway. It's more about they've caught up with their drilling rigs or they're changing out frac crews and are going to be down for awhile until they get reestablished. Or permits have been an issue in some cases. So it's a variety of things. But these are strong clients that we have great relationships with, and they fully expect to go back. But it's a short-term issue that's going to affect a little bit of our utilization in the third quarter, and that's what led to our softer guidance.

We had 108 units average kind of for the quarter. But in July, we sold the 4 skid units. And there again, we're redeploying the people to other markets, so we ended the quarter presently at 104 units.

I'll turn it over to Lorne to give you a little more color on the financials. Thank you.

Thanks, Stacy. Good morning, everyone. This morning, we reported revenues of $154.8 million and adjusted EBITDA of $16.9 million. Our reported net loss was $18.2 million or $0.23 per share. Our adjusted net loss was $14.8 million or $0.19 per share, which excludes the impact of impairment charges and valuation allowance adjustments on deferred tax assets.

As Stacy mentioned, adjusted EBITDA was negatively impacted by a number of items, including, first, an increase in the fair value of the phantom stock awards of $5.4 million, primarily due to the change in the stock price during the quarter. Also, as Stacy mentioned, the coils results had a strong impact on production services. The demand for the small diameter coil units continued to be down as well as the higher rental expenses, which were quarter-over-quarter were approximately $400,000 higher. And the sales tax accrual, which was dealing with an audit that looked back almost 4 years of about $0.5 million.

The rental expenses will be mitigated some in the third quarter, but we'll have -- some of that $400,000 will continue. The sales tax accrual will not repeat going forward.

Also, as Stacy mentioned, on the U.S. drilling, we had some higher repair maintenance costs. And then in Colombia, the higher-than-anticipated mobilization and standby activity.

Moving to the segments. Production services revenues in the fourth quarter were $97.4 million, up 7%. The gross margin for the production services business was 23% as compared to 24% in the prior quarter, which reflects the items noted above.

Drilling services revenues were $57.4 million, up 7% from the prior quarter; and utilization was 95%, also up from the prior quarter. Domestic drilling utilization was 100% and average margin per day was $9,550.

International drilling utilization was 85%, and average margin per day was $7,583, down 10% from the prior quarter, due to the items noted a second ago.

Currently, all 16 of our AC rigs in the U.S. and 7 of our rigs in Colombia are earning revenues. Of the 16 rigs earning revenues in the U.S., 14 of those are under term contracts.

Since our last earnings call, we have extended contracts on 6 rigs, 3 of which have or will reprice upwards between approximately $2,000 to $4,400 per day; and 3 of which will reprice downward approximately $5,000 per day from their original new-build terms later in Q3 and early in Q4. Given those contract extensions, our current contract roll off is as follows: We have 1 in the third quarter of 2018, which we expect to reprice upward for a contract length of up to 2 years; we have 5 rigs rolling in the fourth quarter of 2018, of which 4 are expected to reprice upward to the current spot rates; 1 in the first quarter of 2019; 2 in the second quarter of 2019; 3 in the third quarter of 2019; and 2 in the fourth quarter of 2019.

The net result of the contract extensions and repricing activity is that we currently expect our Q3 margin per day to be $9,700 to $10,200. We then expect our fourth quarter margin per day to be down a little from Q3 but still north of $9,500. And then for us to return to the $10,000-a-day range beginning in the first quarter of 2019. In addition to the above contracts, the new-build rigs Stacy mentioned is expected to begin a 3-year term contract upon delivery in the first quarter of 2019.

Turning now to our company-wide expense items. G&A expense was $24.8 million, which includes the $5.4 million of additional expense associated with the increase in fair value of our phantom stock unit awards. For Q3, we expect G&A expense to be $19.5 million to $20 million, which in regards -- in respect to the phantom stock, is based on a June 30 stock price of $5.85.

As we note in our Qs and our K -- in our filings every quarter, is the associated change in the value of the phantom stock units for a $1 change in the stock price. And this quarter, as of June 30, $1 change in the stock price with approximately -- be approximately a $1.1 million change in the accrual for the phantom stock awards.

Depreciation and amortization was $23.3 million in the second quarter and is expected to be flat in the third quarter. Interest expense was $9.6 million in the second quarter and is also expected to be flat in the third quarter. Excluding the valuation allowance and effective foreign currency translation and other permanent differences, our tax rate in the first quarter would have been in the 21% to 23% range.

We had $9.7 million in committed letters of credit and $62 million available under our lending facility at the end of the quarter. The facility remains undrawn and the available capacity is determined monthly based on accounts receivable and inventory levels. At the end of the quarter, our reported cash balance was $63.5 million, which includes $2 million of restricted cash.

Cash, capital expenditures in the second quarter were $19.8 million. We estimate 2018 capital expenditures to be approximately $65 million to $70 million, which includes approximately $23 million for 2 large-diameter coiled tubing units, one of which was delivered in early July; 3 wireline units, 2 of which were delivered in January; high-pressure pump packages for completion operations; and a portion of the spend associated with the construction of the new-build drilling rig that we'll deliver in the first quarter of 2019.

Thank you, Lorne. As I previously stated, we are very optimistic about the overall market. We're very optimistic about how Pioneer is positioned in the market. I don't think any of us expected near $70 oil at this time during this year, so I think the oil price outlook is more favorable than we would have expected it at the beginning of the year. I think our outlook on oil is positive and on activity as well.

Our issues are short-term and related to very specific clients, and then we had some operational things that kind of hit all at once. So this miss in this quarter is a kind of a quarter event and a little softer guidance going into the next quarter, but we are fundamentally very bullish on the marketplace and the services that we're providing in the marketplace.

As the press release states, our production service, we are going to guide down 3% to 5% in revenue. That's because of the softness, mostly in wireline. But margins will be able to hold flat, if not up, a couple of percent.

U.S. drilling, even as down as we were, we still are $1,000 higher than any other publicly traded land contract driller. That's not by mistake; that's due to performance. And we anticipate that average margin to increase from here. We've signed a new-build at a very attractive rate. That margin will be accretive to our overall U.S. drilling margin.

So we think we'll maintain 100% utilization, continue to roll rates higher, continue to have a lot of term contract protection. And we're guiding the margins up from the second quarter to $9,700 to $10,200. And in Colombia, we're kind of back to the guidance we had previously. We don't anticipate having the long moves and issues that we faced in the second quarter, so we're kind of back to our prior guidance there. Staying pretty fully utilized, except for the one stacked rig, and margins somewhere between $8,000 and $9,000 a day.

So with that, we will conclude our prepared remarks and be happy to entertain any questions.

I've got a few for you here, if that's okay. And I want to start with production services and just dig in to the revenue guidance. Can you give us a little bit of color, Stacy, on perhaps just some of the changes within the 3 segments, workover, wireline, coil, in terms of quarter-over-quarter revenue expectations? And then also if you can give us some color on what the revenue contribution was from the offshore business that was shut down?

That's the biggest piece of it. And then the -- July, we had fourth of July, which is kind of a normal issue. But I would say coming out of fourth of July, all the businesses were a little slow in July and didn't really start picking up steam until later in July. And so we got kind of a late start to the quarter. August is busier into July, and it looks like August is going to be busier again. But we still have a few key clients that are not back full steam yet.

And John, just to -- because you're trying to do revenue, how we get to that guidance in Q3. And I think it's not exact, but from an approximate perspective, if you think of well services as flattish, wireline down a little, due to those -- the reasons Stacy mentioned. And then coil up a little, not making up for wires down, but coil being up with the addition of the new unit.

Perfect. That's what I was trying to get to. I'll barrel one more out and then I'll get back in the queue. Again, sticking on production services. When you look at the margins, you get the recovery here in Q3. But then as you guys well know, you have the seasonality issues that hit you Q4, Q1. And I'm just -- I know you don't like to give full commentary guidance beyond the quarter, but it would seem to me that there's more Q4, Q1 could be down a bit before recovering again next year. Does that directionally sound right to you? Or am I off?

But we've refurbed some of the existing pumps, so we'll be able to reduce some cost in coil. But yes, there will be the normal seasonal impacts. But I'd also suggest that, as Stacy mentioned, we do view some of the decrease in revenue as temporary in Production Service in Q3. And so that will work, hopefully, to our benefit in Q4 and Q1 as they resume activity, which does have a small impact on margin as well as the revenue changes.

I would add that the news coming from these clients, there's really nothing negative there at all from them about their view of the market or pricing or their returns. It's just logistical, really, wouldn't you say, Carlos?

Oh, I would say that Q1 to Q2, we probably saw a little bit of pricing increase and we've achieved some pricing increases before and it's holding steady. And at the moment, we're still trying to push pricing. I think we'll probably see a little bit more. But Q1 to Q2, there wasn't that much pricing increase.

Okay. All right, that's helpful. And then, Stacy, I'm trying to put together a comment you made on the call with a comment in the press release. So in terms of alluding to the higher-margin opportunities in West Texas, it sounds like that was referring to, again, the potential to do some well service oriented drill outs in West Texas. Is that -- am I putting that together correctly?

Yes. Now, I won't -- I don't want to say that we'll target solely West Texas, but we've never worked in West Texas in well servicing. And we've not done that because we haven't ever got the returns there that we get in other markets in well servicing. But we've been watching over, the last year, the lateral lengths get longer in the Permian, in Appalachia, in the Rockies, pretty much everywhere. And we're observing that some of the clients are starting to drill out with stick pipe, and we have all these rigs that are just perfect for that. And we have some similarity in the coil with the same type of pump packages. So whether they use coil or stick pipe, we just want to play a role in that for our clients to give them that alternative. So we're pursuing it. We'll pursue it slowly and look at it. But on our preliminary review, it looks like it can be very profitable. And if we can be profitable doing that work in the Permian, then we would love to be in the Permian doing that.

Okay. And certainly appreciate lateral lengths are longer, but do you attribute a part of the customer interest to the rates that large-diameter coil units are currently able to achieve in the marketplace?

I haven't heard that because there -- from what information we're getting, they're paying pretty big rates for the stick pipe alternative. And I think I've heard of cases where they're just getting a little tired of fishing coil out, and they had said, why not let's just do it start to finish with stick pipe? So I think it's a trend to watch. I know some others are doing it, and so we're just trying to educate ourselves on it. But -- and a lot of them are using the large-diameter pipes and then disposable plugs in the deeper parts. They just leave it. So it's just a variety. But I think we're seeing an increasing trend there that we think we want to be in if it materializes.

Well, we'll go with that. We'll go with that. So good to see the new-build and some nice economics on that. With you guys being essentially fully utilized, pricing continuing to move higher, do you have additional new-build opportunities? Or is this somewhat of a one-off just because you have a fairly minimal incremental cost here, so the economics look more like an upgrade than a kind of full-fledged new-build?

Right. We have one more package similar to what we have. In this case, that incremental cost might be a little higher than the 10; it might be 10 to 12, I'm not exactly sure. And we want to utilize that stacked equipment that's been stacked there. We actually received that in late '15, ordered it in '14, kind of pushed out that delivery. But it's been sitting there awhile and we'd like to utilize it. It's sub cost at this point. But we're careful too of not overcommitting on our capital spend. So it's not something that we've got initial -- we can get it signed up today for the same terms and conditions. We had a lot of people looking at our rig, and we could easily sign up that second one out of the same terms and conditions. But we're cautious to commit to that much spending until we get our cash flow up a little bit higher. So we do have one that we can do, but we're going to hold off on doing it.

Question on the number of -- I guess, Stacy, how many well service rigs do you currently have? Like what's the percentage of well service rigs doing drill out work versus just regular kind of well servicing or workover work today? And where do you think it could go? I mean, have you thought about that?

Well, if we're -- we do completion work. Like I mentioned earlier, I think we have 4 24-hour jobs going now, and we had 5 yesterday. I know some of those are doing completion work, but I'm not aware of any of them doing drill outs. So I would say drill outs, we do, do drill outs on occasion, but it's very rare. And so this effort to pursue the drill out market would be something new for us. Most of -- probably 80-ish percent of our work is maintenance-oriented. The other 20% is probably completion-oriented, and some of that is 24-hour. And some of the maintenance is 24-hour as well. But it's more traditional completion work, running tubing, putting down all the equipment in, getting on a pad and doing a series of wells 24-hour, but drill outs is not a big piece of it.

Okay, all right. And then my follow-up is you commented on wireline pricing, but maybe I missed it. Have you -- could you give us some of your color on the pricing environment for the well service market right now?

I'd say well servicing is stable. I'd say we're not -- we're always trying to push pricing, but I think we're already the highest-priced out there. We could use some help from the market. But pushing pricing is tough when you're at 50% utilization. So we're -- we have pushed some pricing, and we're always trying to push pricing. But a lot of the competition is not pushing it too much. So it's just challenging. And labor is very, very tight. Very tight.

And Jud, I'd just say our rate per hour was up from Q1 to Q2, a little under 5%, I think, to 5 40. And it -- like Stacy said, it feels like that's holding, but we seem to have gotten some benefit there in Q2, but it's still a very challenging market to push pricing.

Yes. Well servicing is just tough all the way around, from a competitive standpoint, from labor, pricing. That's why we're trying to ferret out more high-margin opportunities to get a chance, to get a little bit greater return and get more of the units out. Fortunately, we have 20 of these tall masted units that would be ideal for drill outs if there's enough drill out to warrant buying the pumps and the swivels for it.

Sorry, I was on -- I had muted my phone. Forgive me. Sorry about that. My question isn't particularly well-formed, I think. But I would love to hear your thoughts around the competitive landscape in coil and wireline, maybe especially with an eye on smaller players. Was there sort of an entry-level of players trying to get into the business? And if so, how are they doing, do you think?

Well, I'll take a crack at that. I think that overall, if you just look at how the landscape has changed over the last few years, I just think the concentration in the U.S. -- in the shale basins in the U.S., 4 or 5 years ago, there was a lot more activity in other areas. And so I'm not really seeing -- for us, I kind of view our size as an advantage over a smaller company. When you have multiple districts and you have the logistics that we have, we can respond when activity increases in one area versus another, that a smaller company might have difficulty doing. And so I'm really not seeing that much of an impact from that standpoint. But I just think overall, we're just in a slightly tougher environment given that things have concentrated and the big players are all still there.

Got it. Do you sense that -- I guess part of what I'm am asking, too is I've sensed or I've heard, but it's a little general what I've heard, about companies -- a number of companies being for sale and sort of something along those lines. And I guess I'm curious whether companies participating in coil and wireline are included in that list. Are there opportunities then -- not to comment on your balance sheet or necessarily per se your interest in them, but I'm just curious, is there -- are some of the companies that we're hearing about maybe struggling companies in this area, or these areas?

Well, there are quite a few companies for sale in the production service space and for a variety of reasons. Some aren't doing too well. Others are doing really well and want to capitalize on a sale. So there will be a lot of consolidation. There's a lot of private equity backed production services companies out there that at some point, will be seeking exit strategies. So there's, like Carlos says, the world's shrunk in that everything is focused on the big shale plays, and that client base is also shrunk. I think the bigger guys have a big advantage, as Carlos mentioned, because we've got good relationships. A lot of those same clients are in the Bakken, they're in the Eagle Ford, they're in the Permian, they're in the Utica. So it's -- you develop a relationship with them. You work in multiple markets. And we move personnel from district to district. So we're certainly one of the biggest wireline companies out there, I think perceived to be one of the best. And we offer all the services. We're not just pumped down focused. There's quite a few of them wireline companies that are strictly plug and perp oriented. We're that, but we offer all the broad services that wireline companies -- the types of services that we offered in 2015, '16 and '17 when there wasn't any plug and perp work. So we continue to really promote that. It takes a little more skilled person, and we like the diversity that it provides. But there will be a lot of stuff kind of changing hands, I think, over the next couple of years just because for all those reasons that Carlos pointed out, it's just a very tough competitive environment. Scale helps you out.

I'm going back to come back to the well service rates. Actually, you all had a pretty nice increase there quarter-to-quarter. Two parts to this question. Was some of that due to mix, maybe more 24-hour work? Or -- and/or how sustainable is that? I mean, you sound like yes, we're not high utilization. I worry more about is there a risk to that going back down to where it was last quarter?

Well, the first part of that question, I don't believe it was due to mix. I think it was a real price increase. I think the risk of that coming down doesn't -- we're not seeing that yet. It feels like we can keep it there, but we're reluctant to say we feel we can push it further. It's very challenging, as we said. And the other reason that we do need to work hard in all our businesses, particularly wells to push that rate is the labor cost, as Stacy mentioned, there's pressure in labor, and we need to try and make sure we're covering that. So I think we can keep it there, but pushing it further is, right now, we wouldn't count on it in the short term.

Yes, I would say the bias is more to the positive than going back the other direction. I think we're seeing a little pickup in our 24-hour work right now, and hopefully, that trend will sustain. And I think $70 range oil is pretty attractive. I don't think any of us thought we would be there at this point in the year if you asked us at the start of the year. So if oil prices can hold in here pretty firm, I think that business will be very solid.

I certainly agree with that. Unfortunately, most investors are freaking out over this Permian differential. I know you guys don't have a huge exposure there. What I'm more curious, are you seeing any trepidation or hesitancy from your -- I know you're -- in the wireline side, you got to slow down. You were pretty clear that it's not related to anything structural. But are you seeing any spillover or any risk in your core areas due to the potential -- again, it's not happening yet, but the potential weakening in the Permian?

And I would even say that we are pursuing more opportunities, say, in wireline in the Permian. We're seeing some opportunities there that are presenting themselves. We're there with a couple of units doing extremely well. We're seeing some additional opportunities there. So actually, we're probably focusing more on the Permian now than we were before just because we see some opportunity.

Perfect. Last one for me. You haven't spent a lot of time talking about the international rigs. What's the latest there? Just give us your sense of where that market -- I guess, the last kind of updates we've gotten are it looks pretty bullish, it looks pretty healthy down there. Is that still the case? And just give us a little color on what you guys are seeing down there.

I would say it's very healthy. From our perspective, it's probably the healthiest since we've been there because we're not dependent on one client. We now have 4, mostly the Canadian public guys. And we really enjoyed the partnership, working relationship that we have with them. They're real good people. We don't -- we're not required to have all these redundant equipment and extraneous equipment on location. They work with us. They're -- all of them are bullish and have a lot of activity planned. So I think we will have an opportunity to bring that last rig out. We need to spend probably a few million dollars, but we would be willing to do that for the right type of work for the rig. But our margins are going to come up there. We've had people request, beg us to bring well servicing equipment down there, and we continue to evaluate that. We're slow to move on it, but we're just -- there's lots of interest in high-quality services. And so I'm -- I think we're probably as bullish on Colombia as we've been.

We're not going to give that guidance, but we've -- I would say that we're very optimistic about those margins. They could easily be in that same range over time as we settle some things out. We've improved a number of aspects of our operations there that will enable that margin to strengthen. So it's complicated there. There's lots of issues. We're in many different markets in the country. There's different communities, socialization. We're really good at that. But pay rates are different in different areas. You've got to work with the local communities. So we don't want to get out over the skis. So we're going to let it mature, but we're hopeful that margins will improve over time. We think next year could be an exceedingly good year for us in Colombia.

Okay. Sounds good. And then as you guys well know, well servicing as very much a vulcanized business. And when you think about tight labor situation that exists, as you contemplate moving into the Permian for the drill outs, it would seem that maybe the better way to do it would be through a tuck-in sort of platform acquisition versus trying to (inaudible) again? Just your thoughts on that statement?

Well, that's a very good, valid question. I will tell you that, that is not the first market we'll go into. We have cautiousness over that market. We always have. Drilling is something different. We're pretty much term contract-protected. The takeaway issues can't affect us. Wireline, we're a niche player in there, but we see other niche opportunities at high margins. I would say on the drill out, it would be our probably third market we would look at. We have other reasons to look in some markets with less competition. And we'll look into those first more than likely.

Well, it includes a portion of that. Some of the new-build rig that Stacy mentioned will be this year and some will be next year. But the coiled -- the 2 coiled tubing units combined are about 10 million of the 23 million, and that's all this year. And then the new rig, the piece of that 10 million of spend this year is probably around 6 million approximately. And then the rest is between pumps and the wireline units that we're taking delivery of.